Last week, I wrote a piece about Last Minute Travel Club (LMTC) that appeared to offer very nice discounts on chain hotels. The only drawback was that it requires you to join their club that normally sells for $49.99, but you can get it for free most of the time. They have another promotion for a free membership going on again.
Their pricing really intrigues me as it is so low at times compared to branded websites that it borderline makes no sense.
Here are examples from Hilton, Hyatt, Marriott & Starwood
Hilton, Hyatt and Starwood are for one night arriving on November 16. The Marriott property is for arriving on 20th for one night.
Hilton New Orleans Riverside $72.64 VS $224
Hyatt Regency New Orleans $72.96 VS $146.30
W New Orleans $164.08 VS $219
Ritz-Carlton New Orleans $128.79 VS $249
LMTC also has a “conventional” non-members website LastMinuteTravel.com. They do have some of these deals there as well, but they cannot display the name of the hotel and the price is bit higher. The hotels that they name are about the same price that you can find on other websites.
For the hotels that they cannot show the name, they give the above explanation.
They must have access to opaque prices for these hotels, but they are not allowed to display the name of the hotel. It seems that they can get around this limitation by advertising their own club that requires a membership fee, but is essentially free to join. Once you have joined the club, they can display the lower prices and names of the hotels.
If you look at the prices for the hotels above and compare what they are going for on Priceline (betterbidding and biddingfortravel), LMTC is very close to the Priceline pricing. But why would you go the Priceline route if you can get the same price and confirmation about the hotel instantaneously?
Why hotels offer “opaque” pricing?
Hotels want to maximize the revenue they get in. It is difficult to offer much differentiated pricing on the branded website i.e. Hilton.com. If you have a higher price first and then start lowering it a lot, people who booked and maybe prepaid may get dissatisfied.
Also, if you would see Ritz-Carlton on Marriott.com for $129 it might “cheapen” the brand. People would expect to get it at the same price in the future.
Hotels can dump excess inventory and at the same time not lower their headline pricing by going the Priceline/Hotwire route.
The Last Minute Travel Club appears to work best in the markets that have excess inventory at times like New Orleans. I have always had very good luck with Priceline for booking hotels in the city even when the prices are “high”. Now, I can also check the prices on LMTC and be sure about the hotel that I will get as you can get instant confirmation.
Note that LMTC has some hotels that are on request i.e. the opaque inventory has been exhausted/not available, but they can send a request to the hotel.